Our lifestyle might not be sustainable, but our standard of living probably is. There are a lot of ways that we’re incredibly wasteful, where we could get very nearly the same benefit for much less actual cost in resources and labor. We don’t care too much about this because we’re rich enough to afford the waste, but we probably should.
Also, if every nation on earth were rich that would also, in theory, mean more human and financial capital was devoted to R&D. The end result of that (again, in theory) is that products which are better and cheaper than the iphone would hit the market. Maybe 1.5 trillion in USD goes to global R&D. If the entire planet had 40k in per capita income and spent 3% of GDP on R&D, that would mean 8.4 trillion in USD for R&D each year.
Right now most R&D is done by north america, western europe, east asia and a few other OECD nations (Israel, Australia, new zealand, etc). If Africa, latin america, the middle east, eastern europe, southeast asia, etc had the same level of wealth and devoted as much human and financial capital to R&D, this would increase the human species problem solving skills.
So it would be a trade off in a way. You’d pay more for an iphone, but in theory, you’d have innovations that gave you better and cheaper iphones too.
Of course in theory. China has a per capita income less than Mexico or Brazil, but spends a far larger % of their GDP on R&D. Plus many western nations only spend 2%, not 3%.
Long ago.
Shipping was difficult. Most things were made more locally. Economic cause and effect was more obvious right in your town, city, country. The people involved in certain production and labor were more obviously in their economic bracket. Foreign products were often more expensive, as they were shipped in. The foreign economy was not very attached to or controlled by your own. Poverty was more common.
Some countries moved ahead faster with technology. This decreased the labor and cost of a lot of things. Fossil fuels replaced human labor. At first, this brought a greater concentration of wealth to those who could build the factories and such. Labor strife, and taxation schemes made a more even distribution of that wealth. Shipping goods got cheaper with technology and fossil fuels. For a while, tariffs and tax schemes sought to keep balance. But over time they were dropped. Politicians were bought off.
Also. Richer countries, regularly smash down countries that are supplying them cheap labor and products. To ensure that they do not use the meager profits to improve themselves to the point that they can self sustain. Or more horrible yet, compete.
When bringing freedom and democracy to countries that are doing relatively well already. The first bombing targets are infrastructure that the civilians need. Power, water. Desperate people work cheap. Are easily led. The new creeps in charge sign whatever agreements their handlers present.
The economy is not a zero-sum game. It is possible for everyone to win.
I don’t disagree with you.
But that doesn’t take away from the fact that SOME of our wealth can be because of cheap labour from developing countries. All the clothes we buy are much cheaper than they used to be. At least here in Norway.
I am interested in how big this effect is. Seems like it is not really that big for iPhones, judging by some of the previous answers in this thread.
The OP might gain from reading about World Systems Theory, first developed by a guy named Wallerstein a few decades ago, and since refined. It’s not hardcore Marxism at all, just as held up way of approaching an understanding of these matters.
It’s important to keep in mind that the economic/political interrelationships operate at different scales simultaneously – while the OP asked about different countries vis-a-vis the US, we shouldn’t focus on that scale unit (the country) too much.
This is an important question, but I’m a bit concerned that you and the others contributing to this thread are trying to answer it a-historically. A lot of the current wealth of Europe, and by extension (to some degree) the US, Canada, Australia, and a few other places, exists thanks to things that happened and were set in place during the colonial period – the New World colonial era, especially, but also the later 19th C one. Slavery (and other forms of labor), distant natural resource exploitation…
Sure, some of this set the stage for eventual economic success of several developing (ex-colony) countries…but a lot of it (impossible to say exactly how much) put into motion what led to the rich-poor geographic contrasts of today.
“Post-colonial” social scientists prefer to emphasize how many of these same processes are still very much active today (don’t be fooled – “post-colonial” usually is meant ironically, the implication being “actually-still-colonial”). Their arguments have merit, but can be overdone, I think. But the historical set-up for today’s situation is very real (though there’s plenty of room for debate over degrees of emphasis and details of cause and effect).
It is possible, indeed. But that’s not how we’ve decided to play this game.
I live in perfect comfort in the USA on $13K a year, my social security benefit. I have pleasant apartment in a safe neighborhood, hot running water, comfort of heating and AC, and a substantial and nutritious diet. And I’m just home from a round the world trip, my second in two years, the one luxury I afford myself.
What Americans have, which is gouging the rest of the world, is the obscene plethora of luxury toys. If I had a car, an iPad, cable with a 55-inch screen, designer pajamas, a pet, and a daily latte, it would double (literally, if not more) my cost of living. Or that of anybody else in the world living on the global average GDP.
For a long time, esp. in the 1950s and 1960s, it was explicit US policy to provide aid to developing nations so that their economy would improve and their standard of living increase.
The goal: so they would buy more US products. The income from these exports would outweigh by a very large margin the cost of the aid.
It did work if the country was politically stable and relatively graft-free. So, not as often as we’d like.
It’s the corruption and instability that holds back most 3rd world countries.
Sure, we benefit a bit from low wages and cheap resources in other countries. We’d benefit even more if their standard of living increased somewhat. Even if all countries had the same costs of labor and resources, basic economics means that’s a win for everybody. Economies of scales get better, etc.
In particular, some girl that would have died at 6 in the Congo could instead grow up, get an education and figure out a feasible fusion reactor. We’re wasting an immense amount of human resources the way things are now. People grow economies.
You have 13k a year in personal income. But what about all the other forms of wealth you have?
Medicare probably invests several thousand dollars a year in you.
You also live in a country that has a working police force, firefighters, education, roads, energy infrastructure, military, etc. You benefit from those, and if true per capita income in the US were 13k, then there wouldn’t be enough money left over for those things.
Those things cost money too, and they increase your standard of living but they are not part of the 13k. Education costs about 1 trillion a year in the US. If we didn’t have that, we wouldn’t have a working society since nobody could keep it running.
I’d guess you probably enjoy a lifestyle that costs 20-25k a year when those costs are factored in.
As someone pointed out, the world economy is not a zero-sum game, and much of the left-wing hand-wringing in this thread is misplaced. China voluntarily sells us toys and clothing; we’re not coercing them. Much of their domestic spending degrades their environment and adds to their own misery. But if we stopped buying their toys and clothing out of a misplaced “charity”, it would just add to their poverty.
Has the rich West exploited the 3rd world in the past? Of course: consider the colonialization of Africa. And much more important than the direct confiscation of wealth centuries ago, is the lopsided wealth distribution that continues to the present. There is no 4th-world for the 3rd-world to exploit and use as a stepping-stone to its own wealth. This is exacerbated by trade deals which prevent poor countries from subsidizing local industries to jump-start a path to prosperity.
Has the West exploited the 3rd-world in the post-colonial era? Yes, again. Some of the “aid” programs operated largely as boondoggles for Western corporations, with the aid recipient often suffering degradation from poorly planned programs and debts the rich West was unwilling to forgive. Political interventions, e.g. the 1953 Iranian coup d’état or the 1973 Pinochet coup, might be the subject of their own GD thread — did they help or hurt 3rd-world efforts to improve their people’s fortunes?
However none of this directly explains poverty in China or India. Their woes are not because of their exports. Without those exports their misery would increase.
If the West wants to improve the lot of the world’s poor countries, cutting down on the consumption of luxuries is not the answer. Debt forgiveness would be a useful step. Also useful would be reducing corruption: the U.S. cannot snap its fingers and eliminate corrupt governments, but it can change its policies to reward governments whose policies help their own people’s interests rather than U.S. interests.
But there’s a ticking time-bomb. If the billions of people in poor countries start consuming at Western levels, it will exacerbate the problems of scarcity and environmental destruction the world faces. There are no easy answers.
Cite?
This is actually a straight forward question isn’t it? Relatively speaking that is. You have to have poor people to compare your wealth to for you to be rich.
And those developing countries are benefiting from it too. They make a profit on the products they produce which feeds back into their economies. One day those developing countries will no longer be developing countries but developed countries.
What if the USA were to close its borders completely - no exports and no imports?
In the short term, there would be huge shortages of all those things where imports are pretty much all there are, but what about the longer term? Could you be totally self sufficient?
Many American companies depend on experts - would they fold or could they shrink to cater for domestic only? I am thinking Apple or Microsoft for example.
I have savings but I do not use it, I live on my income. My actual month-to-month expenses add up to about $800 a month. I pay my medicare premiums out of my income. Most of the countries with PPP around $13K have universal health care for all citizens. They also have “a working police force, firefighters, education, roads, energy infrastructure, military” which seem adequate to me. Most the one trillion dollars for education in the US is wasted, on a 50% drop out rate, art history majors, remedial courses, and community colleges preparing people for things that can be learned on the job in a month.
Trade increases wealth. Our current trade with countries like China had improved wealth both sides. And while Chinese workers do not have the protections that we have, their economic empowerment is allowing them to make progress toward safer, greener, fairer environments. It won’t come fast enough, but it will come.
With that in mind, history sometimes isn’t history. Africa faced a massive depopulation of its productive workers during slavery, followed by the appropriation of its resources during colonialism, followed by the weak political institutions established for Cold War political game playing, culminating in today’s issues with extractive industries-- all of these have long lasting echoes. Wealth builds upon itself, and poverty can lead to a spiral causing more poverty.
But the real cause of inequality is that we all live in highly regulated labor markets-- specifically, we are protected from competition from people outside of our country. The bus driver in Houston who makes $85,000 a year does the same work as the bus driver in India who makes $3,000 a year. It’s immigration laws that prevent the bus driver in India from accessing better markets.
History since the XVth century ?
Or just human nature. We always try and get the better of The Other, and business is just another arena for Us vs. Them. An economics professor of mine used to quip that the only measure of a fair and equitable commercial deal was when **both **actors thought they’d fucked the other one over.